How to Improve Your Industrial IoT Business Models for Greater Success

We’re living in an era of opportunity for the Internet of Things (IoT). Today’s IoT technology has reached a level of maturity and sophistication that was unimaginable when the internet was still in its infancy. However, many companies have yet to take advantage of the new advances that the IoT can bring to their business, especially those working within the industrial sector.

In order to leverage Industry 4.0 business models, today’s industrial leaders need to engage with the latest technology and adapt to the more prominent role that the IoT plays in their businesses.

It’s not enough to have industrial sensors installed in your equipment; you also need to step back and think about your customer engagement, your data strategy and how to leverage your industry’s ecosystems so they work well with your existing products. In other words, the best IoT technology will support your entire company from the ground up, rather than existing as an afterthought, or an add-on. By building your business model around the IoT, you set the stage for future success.

Success Requires Four Key Areas of Development

To refine your industrial IoT business models, focus on four main areas of development: innovation, engagement, productivity and trust. When you consider all of these factors, you solve most of the challenges associated with modern IoT technology, and you give your company a competitive advantage.

Innovation
Innovation is primarily focused on using the latest technology to open your business up to new and better opportunities. By focusing on innovation, you can create new revenue streams that weren’t previously possible. An innovative industrial IoT business model will make the most out of commercial engagement models, leading to greater flexibility in the future.

Engagement
The area of engagement focuses more on your company’s relationship with your customers. How are you engaging with your customers on a daily basis? The goal of improved engagement is to retain a strong, loyal customer base and to interact with your end users more effectively.

Productivity
You also need to ensure that your business is operating at peak efficiency. This entails keeping your operational costs as low as possible, while producing high yields and encouraging more uptime. Productivity is the glue that binds the components of your business model.

Trust
Finally, you should think about whether your company is considered trustworthy. Trust goes well beyond security. Your equipment and data should be protected, of course, but it’s just as important for your customers to feel safe and secure when they use your system. Your security measures will only cultivate some of this trust. Your company also needs to consider how you’re engaging with customers in the realm of security and whether they feel that their information is safe.

However, when you analyze your industrial IoT business models using these four areas of development, you should only focus on improving one area at a time. Often, solving the challenges in one area will have a positive impact on problems that you may have in another area. For instance, by improving your company’s trustworthiness, you may, in turn, improve your company’s engagement with customers.

How to Start Improving Your Industrial IoT Business Models

One common mistake that companies make as they work on improving their industrial IoT business models involves making too many changes in too many areas. Instead, you need a specific starting point and a plan for creating the right set of components to drive these changes. Let’s say that you operate an industrial washing machine company. If you sell your machines as standalone products, then your business model is operating at the “first level” of service. From here, if you were to add IoT technology to your model, you would need to plan your transition carefully.

You will first add value to your products by embedding sensors into every machine. These sensors would provide customers with information about the health of the machine, such as when to change the filter or the piping. Once you have this technology in place, you should take a bird’s eye view of your business model, looking at the full ecosystem of services that may be available to you in other sectors. In the washing machine example, you may decide to provide the machine and sensors to customers and then connect those customers with maintenance or parts suppliers, who will be contacted whenever the machine needs repairs. This will improve your engagement with your customers.

Finally, if you want to take your business model to the next level of service, you may simply offer washing as more of a service than a tangible product. For instance, your customer would no longer buy the equipment; instead, customers would just pay whenever they use one of your machines, and you handle the rest. This model will require all four key areas of development to become well-established and run smoothly.

You can pursue any industrial IoT business models that you feel are well-suited to your company. However, regardless of which model you choose, you should always take your transition process one step at a time, with all four key areas of development in mind before you proceed to the next step.

Identify Your Strengths and Weaknesses

In addition to identifying the four areas of development, industrial businesses also need to think about how they can improve their business models using the tools that they already have. And if your company doesn’t already have all of the tools you need to be successful, then you need to set up a plan to outsource these tools and services. To set up your specific plan of attack, you’ll need to follow three simple steps:

Step 1: Figure out your business objective. Choose just one of the four key areas of development and identify its challenges or areas where your company needs to improve.

Step 2: Define your company’s role. Is your company capable of solving this issue in-house, or do you have to outsource any of these solutions? In general, consider what role your company can actually play in improving your areas of development. Remember, it’s perfectly fine to outsource your solutions if you need help.

Step 3: Plan your steady-state operations. What tools do you need to ensure that your company continues to operate at maximum efficiency?

By following these three steps, you can dramatically improve your industrial IoT business model, without disrupting your company’s current operations. Your goal is to find a harmonious balance between new IoT technology, marketing and customer engagement, which will serve your business well into the future. For more information, watch our Connected Strategies on-demand webinar.

Start with Sierra for expert recommendations on the best IoT technology solutions for your business and how to integrate new systems into your existing business model.